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MBell Media

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MER Calculator

Figure out your current and target MER based on revenue, ad spend, and margins.

Tip: Provide either Gross Margin or COGS. If both are filled, Gross Margin is used.

Hint: MER ≈ ROAS ÷ paid revenue share. Example: 2.0x ROAS at 60% paid share → ~3.33x MER.

Results

Current MER

2.50x

Break-even MER (contribution = 0)

1.67x

Target MER (for desired contribution)

2.00x

Effective GM / COGS

60% GM · 40% COGS

Gross Profit

$60,000

Contribution Profit

$20,000

Contribution Margin

20.0%

Allowable Ad Spend (to hit desired)

$50,000

Difference vs Current Spend

+$10,000

ROAS ↔ MER Playground

Implied MER (from ROAS & paid share)

3.33x

Required ROAS (to hit target MER)

1.20x

Required paid share @ target MER

100.0%

Implied paid share @ current MER

80.0%

MER ≈ ROAS ÷ paid revenue share. ROAS measures paid efficiency; MER tells you if the whole machine is working.

How MER works (and why it matters)

  • MER = Revenue ÷ Ad Spend. It looks at the whole business, not just channel ROAS.
  • It’s useful because it captures all demand captured in the period (brand + performance), and it’s hard to game.
  • To break even on a contribution basis (Gross Profit − Ad Spend = 0), your MER should be about 1 ÷ Gross Margin. E.g. 60% GM → ~1.67x MER.
  • Pick a target MER based on your margin: Target MER ≈ 1 ÷ (Gross Margin − Desired Contribution Margin).
  • Reality check: include non-marketing overhead, returns, and discounts when you set targets over time.

Use MER as your altitude metric for pacing and budgeting. Pair it with more granular metrics (AOV, CAC, payback) to make creative and channel decisions.